Saturday, February 7, 2009

Cash for Clunkers: Good or Bad?

A recently-introduced bill, designed to stimulate auto sales by offering payment vouchers to individuals who scrap older, less efficient cars has been met with some opposition.

As a not-for-profit, the Microcar & Minicar Club isn't taking sides -- but we are interested in knowing what you think of the legislation.


  • Stimulate sales of new cars

  • Improve overall fuel efficiency

  • Reduce pollution


  • Current trade agreements may not allow the vouchers to be limited to US auto purchases

  • Destroys older cars (eliminating potential as vintage/collector cars)

  • Questionable whether the environmental impact of manufacturing a new car outweighs the improved emmissions

Decide for yourself. This is a recent article from Automotive News.

Cash-for-clunkers hits roadblocks

Details snag bill designed to restart sales, cut pollution

Harry Stoffer and Amy Wilson

Automotive News February 2, 2009 - 12:01 am ET

Automakers and dealers are pushing federal legislation that would pay motorists to trade in old gas-guzzling cars and trucks for more fuel-efficient new vehicles.
But the measure is running into trouble, government and industry sources say, because of disagreements over its details.
As written, the legislation appears to favor companies that build large numbers of hybrids and small cars.
Proponents say the scrappage measure would promote new-vehicle sales, cut fuel consumption and curb air pollution. Ford Motor Co. CEO Alan Mulally told Automotive News that such fleet modernization would help "revitalize the industry."
Sen. Dianne Feinstein, D-Calif., and Rep. Steve Israel, D-N.Y., are sponsoring virtually identical measures. Their legislation would offer vouchers of as much as $5,500 to buyers of highly fuel-efficient vehicles that replace cars and trucks that get less than 18 mpg.
Supporters estimate the program could cause as many as 1 million vehicles a year to be scrapped.
In an interview last week, Mulally said Ford would "be in a good position" to benefit from the measure because of its fuel-efficient offerings. General Motors and Chrysler LLC also support the legislation in principle, industry sources say.
Import brand automakers like the scrappage concept but want to ensure that all manufacturers are treated "equitably," says Kim Custer, spokesman for the Association of International Automobile Manufacturers.
The UAW wants to restrict the vouchers to sales of vehicles made in the United States, says Alan Reuther, the union's legislative director.
Six states have experimented with similar measures, also known as cash for clunkers or accelerated retirement. California and Texas are leading examples. Some state programs do not require motorists to apply the money they get from retiring their old vehicles to purchases of vehicles.
The Texas and California programs aim to get older, polluting vehicles off the roads in areas that don't meet air quality standards. California's program pays motorists as much as $1,000 to retire vehicles that fail a smog test.
Unlike California and Texas, a nationwide cash-for-clunkers program would be primarily an economic stimulus.
But hobbyists and makers of aftermarket parts and accessories say scrappage destroys a valuable resource — vehicles for collectors, restorers and low-income households — while doing little for the environment.
The Specialty Equipment Market Association, which represents aftermarket suppliers, helped keep scrappage provisions out of the economic stimulus bill passed by the House last week, says Brian Duggan, SEMA's director of congressional affairs.
David Regan, vice president of legislative affairs for the National Automobile Dealers Association, says fleet modernization language could be added to the stimulus bill in the Senate this week.

1 comment:

Craig White said...

nice article upon pollution issue.....